Case Studies: How to Build Online Businesses That Gross $250,000+ Per Month

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My specialty is modeling success. I analyze what works and ask: what recipe can I find that others can use?

In this post, we’ll dissect five successful online businesses. Some of them (e.g. GoldieBlox) are now grossing $300,000+ per month…and it’s the founder’s first company! One (Fresh-Tops) has gone from 1 to 20 employees in six months. Some of the other stats are even more impressive.

The highest monthly sales by a contestant in the FIRST two months of starting, excluding any pre-existing businesses, was $196,811. How would that change your life?

Design, Art and Home
Gadgets and Electronics
Fashion and Apparel
Canadian [Because Shopify is based in Canada. Go Canucks!]
Everything Else

So… What do they all have in common? And what can you replicate on your own?

For both questions, the answer is: more than you think.

[Sidenote: Have you seen the brand-new competition, launched yesterday? Grand prize is an all-expenses-paid trip to Necker Island, Richard Branson’s private island, to be mentored for a week by Richard, yours truly, Seth Godin, and a bunch of amazing folks. Check out this description.]

Without further ado, let’s analyze these five rock stars, looking at what they did right and, just as important, what they did wrong…

5 CASE STUDIES

Electronics & Gadgets Category Winner: GameKlip

The GameKlip is a device that attaches your Android phone to a DualShock3 controller, normally used for the PlayStation3. This allows you to use a real controller to play games on your smartphone. It opens the Android platform up to more than just “casual” gaming with touch screen controls, and really gives you a full console experience at a fraction of the cost.

How did you decide on your product? What ideas did you consider but reject, and why?

I was frustrated with the controls on my smartphone. Touchscreen controls worked okay for simple games, but anything more complex was impossible. I made a bracket to hold my phone onto my controller, and realized other people might want one too.

I didn’t reject any other product ideas. I set out looking for a solution to a problem I had, instead of looking for a product to sell. Once I had my solution, the GameKlip, I focused on finding a way to share it with others.

What were some of the main tipping points (if any) or a-ha moments? How did the tipping points happen?

The first a-ha moment was when I snapped my phone onto my controller for the first time. I found myself playing games for hours, and really enjoying the experience. I stayed up all night bending plastic and trying out different shapes until I arrived at a design I thought was efficient and presentable.

The second a-ha moment was when I posted a video of my prototype and started pre-orders. I realized there actually was a demand for my creation. I used the pre-orders to fund my first batch of plastic.

The third a-ha moment came when I realized that I couldn’t continue hand-making the GameKlip forever. I spent all my money on a mold so I didn’t have to make the GameKlip by hand anymore. I couldn’t afford a mold for every phone, so I cut the product line down to just two versions, a model for the Galaxy S3, and a universal solution. The community met the new models with open arms and demand increased immensely.

My final a-ha moment was when I could finally contract my assembly process. I was able to use some of the funds generated from the new molded version to contract out an assembly line. Now that my production process was scalable beyond the hours I could put in myself, the GameKlip was finally ready for retail distribution.

What were your biggest mistakes, or biggest wastes of time / money?

About half of my time was spent struggling with my spreadsheets and dealing with the post office, instead of focusing on my product, so I wish I found solutions to those earlier.

It’s easy to say that I should have streamlined my manufacturing earlier, but each step along the way was a learning experience. If I had jumped into contract manufacturing and assembly earlier, it’s very possible that I would have taken on too much. If I had unlimited units to sell, with no ecommerce platform to sell them on, it would have been a disaster.

Key manufacturing and marketing lessons learned?

Keep things local. To find a manufacturer, I started with a simple Google search. I found that there was an injection molding company right across the street from one of the restaurants I frequent, but unfortunately their machines were all booked. Even though they weren’t able to take on my project, I was able to use their 3d printer for my prototypes, and they pointed me in the right direction for finding another company that could produce the part.

If you’re just starting out, I’d suggest doing some local searches and talking to as many people as possible. I started by calling a local shop that supplied plastic sheets for home projects. I described my idea, and asked if they knew anyone in the area that could help me make it happen. I found that most people were more than happy to spend a few minutes on the phone to help.

Try searching for a “rapid prototyping” shop in your area. They’ll be able to help make some physical prototypes of your product, and most will have connections with companies that can handle the manufacturing when you’re ready.

When I did get all my manufacturing processes figured out, I was really glad that I kept everything as local as possible. The GameKlip and packaging are made in the USA. It costs a little more to manufacture things here instead of overseas, but the added convenience of being able to drive over and talk to people is incredibly valuable. The packaging is printed, and the units assembled, about half an hour away from my apartment.

As for marketing, I approached that aspect of the company a little differently than most. Instead of making a traditional advertisement, I simply sat down and recorded myself showing the product and explaining what you could do with it. I think it’s important to let the product speak for itself. Everything exploded organically after that.

Any PR wins? Media, well-known users, or company partnerships, etc? How did they happen?

I was an active member on Reddit, and Android forums like XDA Developers, long before I started GameKlip. When I did launch my product, the members of both of those communities definitely helped me spread the word. I couldn’t have done it without them.

The GameKlip has been featured on Gizmodo, The Verge, The Fancy, ABC News, PC World, CNET, Phandroid, Android Authority, Ask Men, as well as many other blogs around the world.

I didn’t make any pitches or hire a marketing firm to get these mentions, they all picked up on my story on their own. In my opinion, having interesting photos of your product is crucial! I made sure I had a somewhat large selection of quality photos available, to make it as easy as possible for writers to feature my story. If I had to do it over again, I would have gone a step further and created a press kit ahead of time. That way it would have been even easier for blogs to pick up on my story.

What software/tools and resources, mentors or groups did you find useful for growing, if any?

The most useful tool to me was Google search. For example, to learn more about international shipping, I simply searched “best way to ship a package overseas” and found that lots of people post on forums with great information. The amount of information stored on forums is incredible!

Software wise, ShipStation is an app which allowed me to automatically pull orders from my online store and create shipping labels. Before I found this I was copying and pasting addresses into the USPS website manually. Now I click one button and the invoices come out of one printer and the shipping labels come out of another. The order processing efficiency still amazes me every morning!

If you were to do it all over again, what would you do differently?

Having a real shipping system and the hardware to back it up (a label printer), would have helped a lot. My two most prized possessions at this point are a shipping label printer and an automatic tape dispenser. When I first started I was running sticker paper through my home printer, cutting the labels out with scissors, and using tape from my local office supply store. I managed to ship over a thousand packages this way, but I could have saved a huge amount of time and money if I adopted a better system earlier.

Any other advice to people starting their first online businesses?

Don’t feel like you need to know everything, or that everything has to be perfect before you start. I knew nothing about running a business, had no idea how to have something manufactured, and had no idea how to ship a package overseas. I’ve now shipped thousands of units to over 80 countries worldwide. It won’t be easy, there’ll be many points where you feel like giving up, but it’s worth it.

What’s next?
I am still pushing forward at full speed. I hope to have the GameKlip on store shelves around the world.

Design, Art & Home Category Winner: GoldieBlox

GoldieBlox is a book series and construction toy starring Goldie, the girl engineer. Throughout Goldie’s adventures, she encounters problems she needs to solve by building simple machines. As kids read along, they get to build along with Goldie, learning basic engineering principles with each story.

How much revenue is your company currently generating per month (on average)?

Over 300K per month.

To get to this revenue number, how long did it take after the idea struck?

About 6 months.

How did you decide on your product? What ideas did you consider but reject, and why?

When I first started, a lot of advisors were telling me to ditch the idea of a toy entirely and just do an app. I decided to do a physical toy (in addition to an app, which we are launching around x-mas this year) because I felt that the tactile experience of building things was a better way to introduce mechanical engineering principles. Screen play alone just doesn’t do it justice.

My earliest toy sketches were girly Legos… curved shapes, tiny decorative pieces, girly themes like princess castles and stuff (a lot like the Lego Friends line of girl construction toys that just launched, actually). I ditched this idea because I felt like it was reinforcing all the same old gender stereotypes. I wanted to push the envelope and develop an idea that didn’t rely on those stereotypes to engage girls. I knew that little girls are more than just princesses and that I could make something different and empowering that they’d fall in love with.

What were some of the main tipping points (if any) or a-ha moments? How did the tipping points happen?

My big ‘a-ha’ moment came when I realized I needed to incorporate a book into the game element. I did extensive research into the differences between the learning styles of boys and girls. I met with neuroscientists and teachers, and I spent a lot of time playing with kids. I asked kids to bring me their favorite toy. Girls would always bring me a book. Boys would bring me a toy. After the fifth girl brought me a book, I decided I needed to blend the construction components of my boardgame with a story. This was a huge ‘a-ha’ moment for me because it significantly changed the direction of my toy.

What were your biggest mistakes, or biggest wastes of time / money?

My biggest waste of money so far was when I first hired a law firm. I met with a few different law firms and I felt really, really good about one with whom I really connected. I liked the lawyer, but he was expensive and because I had limited capital, I hired a cheaper law firm I didn’t like as much. I almost instantly regretted my choice. I eventually had to leave the cheaper law firm and went with my original choice. The cheaper firm made me pay money upfront, while the one I eventually went with was willing to defer payment until I was in a stronger financial position. I wasted a lot of money by making the wrong choice.

Key manufacturing and marketing lessons learned?

1. Prototype and test everything! It’s important to prototype everything beforehand. Then test the prototypes on your target demographic. Long before I approached a manufacturer, I designed the toy myself in my living room. I made crude working prototypes using ribbon, clay, wooden dowels, thread spools, Velcro and pegboard from the hardware store. I wrote and illustrated a book where Goldie built a belt drive to spin her friends, and mimicked the action in the book with the physical pieces.

I probably spent a total of $250 on the prototypes. I tested everything on children around the Bay Area – I went to over 40 homes and 3 schools. I observed girls and boys, ages 4-12, interacting with the game. Every time I observed a child and/or parent playing with it, I learned a new insight, which I incorporated into the next version. I quickly iterated and improved the design until it rocked.

2. Be prepared for the manufacturing part to take a long time. The whole process of prototyping and manufacturing is huge. Example: I sketched out detailed drawings and dimensions for each piece of the board game, but I needed the drawings in CAD. One afternoon, I snuck into an Industrial Designers Society of America “happy hour” to try and find an industrial designer who could assist me. I met a really talented engineer there who was passionate about my mission and agreed to help. Then, I needed the prototypes to be printed, so we used 3D printing technology to take them to the next level. I hired a professional sculptor to create the character figurines to match my drawings. I sent everything to the factory, and they made a manufacturer’s sample. Once I approved the sample, we began the tooling process, which is timely and expensive. It took several months of back-and-forth revisions of the plastic parts until the tolerances were perfect. This resulted in a lot of hair pulling. We are still tweaking the molds. Nevertheless, we finally hit the green light and went into production on a first run of 40,000 toys to fulfill our pre-orders from Kickstarter and our website. Seriously, you can’t underestimate the time that manufacturing takes.

3. Decide if you’re an entrepreneur or an inventor. When I started out I was incredibly secretive because I didn’t want anyone to steal my idea. But then a friend asked me if I wanted to be an inventor or an entrepreneur. An inventor works by themselves in a lab, but an entrepreneur needs to inspire others to lend their expertise. I realized that I needed help. I went out and found the best mentors in the fields I was working in and asked for their help. I had to be specific about what I needed and asked them exactly what I wanted them to do. I was amazed at how much help I got! I saved so much time and money by getting help from someone who had been in the toy business for 30 years.

4. Create an authentic and emotional story behind your product. When it comes to my marketing strategy, I am a brand-driven person and I believe that the most important thing is creating an authentic and emotional story and brand. We’re more than a product, we’re a social mission and I like to give the product a face and personality (mine!) For example, our decision to launch on Kickstarter wasn’t about raising funds. We used it as a platform for sharing our story in a video format. Because then it wasn’t: “Hey! Here’s this toy for girls,” it was: “Hey, here’s this female engineer who is trying to do something about a problem in our society.”

5. Plan your Kickstarter exit strategy. We started on Kickstarter, but a lot of these products just fizzle out when their campaign has ended. We started our Shopify store ahead of time so that people who missed the Kickstarter campaign could still participate. My online store was my saving grace because my video went viral and my shop was up and running to capitalize on the publicity. My online store far exceeded the sales I had made on Kickstarter.

Any PR wins? Media, well-known users, or company partnerships, etc? How did they happen?

Our first PR win happened very early, in fact months before we even launched. I was still in the earliest prototyping stages, but I created a blog to share my stories of building GoldieBlox with friends and family. A friend-of-a-friend’s sister found the blog, she was a writer for The Atlantic. Another friend-of-friend found the blog, who happened to be a writer for TechCrunch. I set up phone interviews with both of them and gave them the “exclusive story.” They both posted wonderful pieces about GoldieBlox the day we launched, which created a ton of buzz.

Another win was that we got Tim Schafer (cult video game designer / Kickstarter celebrity) to make a cameo in our Kickstarter video with his 4-year-old daughter. He then tweeted the link to his 90,000 Kickstarter backers. I met Tim through my banker. When I told my banker I was about to go up on Kickstarter, he made the introduction to Tim’s colleague, Justin, who had just joined on board at DoubleFine Productions (they had raised over $3 million dollars on Kickstarter). I arranged a meeting to learn how they’d done it and to get advice. I hung around there a couple times, until I ultimately persuaded Tim to appear in our video.

When we launched on Kickstarter, we had a lot of influential people in tech backing our project: Sheryl Sandberg (COO of Facebook), Craig Newmark (founder of Craigslist), Alexis Ohanian (Founder of Reddit), Mayim Bialik (Actress, Big Bang Theory), the list goes on.

We also got written up in Forbes, Huffington Post, The Guardian, Wired, TIME, Ms. Magazine, The Boston Globe, The San Jose Mercury News, interviewed on BBC world radio, and NPR. We didn’t have a PR agency or anything. These reporters simply emailed into “info@goldieblox.com” and we set up the interviews.

But our biggest PR win to date was on November 14, 2012, we call it “G Day.” Eduardo Jackson from upworthy.com posted our Kickstarter video about a month after the campaign had ended. It instantly went viral. In just a couple days, the video spiked to almost a million views. There were so many orders, we literally sold out of our first shipment and had to push back the delivery date.

What software/tools and resources, mentors or groups did you find useful for growing, if any?

StartingBloc, a social entrepreneurship fellowship program, was by far the biggest game-changer for GoldieBlox.

Pacific Community Ventures, connected us with a pro-bono advisor, Sam Allen (founder of ScanCafe) who has been instrumental to our business.

I got to pitch GoldieBlox on the main stage at SOCAP and met really great contacts in the social innovation space.

The books “Lean In” by Sheryl Sandberg and “Start Something That Matters” by Blake MyCoskie both inspired me.

I would ask for help from the start. Also, in the beginning I thought I had to make a range of products, but this spread my team too thin and it wasn’t very realistic. I had this idea that if you are a startup, you have to work around the clock until you just about kill yourself. If I had to do it over again, I would only work on one thing at a time.

What’s next?

This month we’re launching into retail stores. And we’re also very busy developing new products to add to the line.

Fashion & Apparel Category Winner: Fresh-Tops

Fresh-Tops is high end fashion for hipster trendy teenage females. Our products are inspired by pop culture with a girly twist. We sell everything from leggings, accessories, crop tops, sweaters and anything that our customers requests that makes sense.

How did you decide on your product? What ideas did you consider but reject, and why?

I experimented with a bunch of brands until we found one that really worked. I ended up with my current brand by being inspired by pop culture, and a love for bright colors and creating fun, cute little things. I believe that to be successful in fashion, you have to stay fresh, and that’s where the name Fresh-Tops came from.

What were some of the main tipping points (if any) or a-ha moments? How did the tipping points happen?

My biggest tipping point was realizing how important social media is to the growth of my company. Being able to interact with our customers 24/7 on various social media platforms has been really, really important.

What were your biggest mistakes, or biggest wastes of time / money?

My biggest mistake was with packaging. When I first created Fresh-Tops I was convinced that fancy packaging and the experience of our customers opening our products would increase sales. Nope. Its better to focus on fast delivery and high quality products rather than packaging, which only eat out on your profits. Once our brand became more established it made more sense to invest in pretty packaging.

Key manufacturing and marketing lessons learned?

1. Network. Getting to know people in my industry played a huge role in developing my company. We found all our manufacturers through referrals from personal relationships. Get involved with the market of your specific products. If you’re in the fashion industry go to every fashion event you can.

2. You can’t ignore social media. Our marketing strategy is completely focused on our social media. We use Facebook, Tumblr, Instagram and Twitter to share pictures of our clothing. Then our fans share those pictures with their audiences. This social influence is very powerful. People tend to shop where their friends shop and they feel left out if they’re not involved.

3. Secure your brand name. We keep our ears open for the next popular network, and we’ll then immediately establish accounts. It’s important to do this for two reasons. First, to secure your brand name before someone else gets. Second, you want to be in these social circles in case they catch buzz. For example, there is a lot of buzz around Keek right now. It’s a social site which allows users to post videos no more than 30 seconds long. We don’t know how we’re going to use this as a marketing tool yet, but at least we have reserved our company user name before anybody else could.

Any PR wins? Media, well-known users, or company partnerships, etc? How did they happen?

No company partnerships as of yet but we are looking to partner with a PR firm and a very well known web development company this year.

What software/tools and resources, mentors or groups did you find useful for growing, if any?

We don’t really use any fancy software or tools. You’d be surprised how much you can do with very little integrated software. A couple of my mentors who I study, and who inspire me are Kimora Lee Simmons and Tony Hseish.

Conference wise, learnt a lot from Fashion Week and Stitch Trade Show in Las Vegas.

If you were to do it all over again, what would you do differently?

Our biggest challenges so far have been holiday seasons. During the holiday season, it was tough to keep up with increased demand, so I would have ensured our stock count was big enough.

Any other advice to people starting their first online businesses?

I would really suggest that if you are starting your own business, it’s very important to listen to your customers and use their input to drive the growth of your business. We relied on email requests and suggestions from our social media fans when deciding how to move forward and what items to add to our line, and it worked really well.

The second thing I would say is just do it. Keep experimenting and keep trying different things and different brands until you find something that works. Be versatile and flexible and you’ll learn and grow as you go along. Stick to doing a few things really well and don’t overextend yourself.

What’s next?

This spring we are starting a new line of shorts which are fun and colorful.

Canadian Category Winner: Canadian Icons

Canadian Icons is an online museum and store that shares stories about iconic Canadian brands like Canada Goose and Manitobah Mukluks alongside rare objects from Canada’s past. We ship every order overnight for free – and sometimes even faster than that. Our aim was to make our website a place where you can always encounter an inspiring collection of Canadian treasures and find out about organizations working to produce, preserve and protect them.

How did you decide on your product(s)? What ideas did you consider but reject, and why?

We wanted to offer items with incredibly strong connections to Canada’s past. If it was something that really resonated with what could be considered to be truly ‘Canadian,’ and it was something iconic, the decision wasn’t really ours to make—the items and the stories behind them would just speak loud and clear.

The items in the Canadian Icons collection are as relevant now as they were 50 years ago, and they will be just as relevant 50 years from now. And, of course, everything had to be made in Canada.

What were some of the main tipping points (if any) or a-ha moments? How did the tipping points happen?

The only real tipping point was when the media began talking about our unique concept of combining storytelling with online sales.

What were your biggest mistakes, or biggest wastes of time / money?

We spent a lot of time early on pursuing a hard copy version of the Canadian Icons collection. We wanted to make a book that could live in the physical world but the web proved to be a much better medium to tell the stories and conduct business at the same time.

Key manufacturing and marketing lessons learned?

It’s important to learn where you can add value and how you can stand out amongst your competition. We quickly learned that customer service was the way we could really provide value. We saw opportunity to fill a gap with our Canada Goose jackets in particular because our competitors weren’t great on service because the demand for these products is so huge. So we decided to offer the best possible service to our customers. This meant overnight shipping in Canada and 90 minute delivery within 50km of our office. We also decided to offer a full return policy, no questions asked and no postage required. Risky, but ultimately worth it.

Any PR wins? Media, well-known users, or company partnerships, etc? How did they happen?

PR wins: Our PR approach for Canadian Icons was determined right up front, we wanted high quality links for Google juice, and we wanted brand mentions in good publications to help drive traffic and support our reputation. We hired a firm to help with PR and have received lots of positive media mentions in Canada.

Partnerships: First, I developed great historical content. I wrote stories about Canadian icons such as the canoe, the snowshoe, and the Group of Seven. I began to curate a collection of high quality content. Then, I approached national cultural organizations such as the Museum of Civilization and got them on board.

Once I had these great partners and stories in place, I presented an idea to some iconic brands, suggesting that Canadian Icons would be the most authentic Canadian place online to tell their brand stories and offer iconic Canadian products in a new way.

For brands like Canada Goose and Manitobah Mukluks, it was clear early on that they “got it.” Both of these companies take great pride in their product’s deep and unique connection to Canada.

What one thing (knowledge, skill, tool, etc.) would have saved you the most headache if you had it when you just got started?

There really weren’t any headaches. I had a lot of experience in Canadiana, in writing, marketing and PR, and I actually enjoy cold-calling and developing strategic partnerships and building relationships.

The hardest part, for me, was building the business online – the actual coding and backend – but that really wasn’t that difficult.

Any other advice to people starting their first online businesses?

Build it and they will not come! You need to put a lot of work into PR. Get your name out there, get featured in the press, get backlinks. Getting in the media really helped people to get to know us as well, but the links that the media mentions gave us really improved our SEO ranking.

What’s next?

We are going to continue to strive to provide Canadian products delivered in a manner never before seen in Canada, stories and world-class service you can only really get right here at home!

Everything Else Category Winner: SkinnyMe Tea

SkinnyMe Tea is an all-natural detox and weight loss program designed to provide fast results and kickstart a healthier you. SkinnyMe Tea is formulated with all-natural, high-potency ingredients rich in antioxidants, vitamins, minerals and fibre. The natural ingredients in SkinnyMe Tea aim to cleanse and detoxify, increase metabolism, assist in the digestion of food, suppress appetite and much more.

How much revenue is your company currently generating per month (on average)?

Over 600K per month.

To get to this revenue number, how long did it take after the idea struck?

It took around 9 months after we launched to reach this revenue; however, as we’re still a very young company (we turn 1 next month) our revenue is still increasing.

How did you decide on your product? What ideas did you consider but reject, and why?

I had a dream about “teatox” one night which gave me the inspiration for the name. When I woke up, I knew that I had a great idea and I started building my business literally the same day. While I have experimented with various ways to package and sell the product, my vision for the product has been the same from the start.

What were some of the main tipping points (if any) or a-ha moments? How did the tipping points happen?

The biggest tipping point is when our revenue from one week was above my yearly wage at my previous job. That’s when it really hit home. I get so excited when we meet targets we never even considered possible when just getting started. I guess it’s time we start setting more challenging goals.

What were your biggest mistakes, or biggest wastes of time / money?

Our biggest mistake was underestimating our rate of growth. We were constantly finding ourselves catching up. Apart from being quite stressful, this meant we had less time to look at the bigger picture and had no time for planning and creating strategies about the new directions our business should be going. That was a big mistake, being able to strategize high-level direction is really important for long-term growth.

Key manufacturing and marketing lessons learned?

1. Make sure you do your research and know which certifications you need. In Australia it’s important to find a manufacturer with TGA (Therapeutic Goods Administration) approval which isn’t always very common for tea manufacturers because tea isn’t often classified as a therapeutic good per say. That was a challenge in itself.

2. Make sure you will be able to scale your business to keep up with increasing demand. When you can afford it, be overstocked rather than under-stocked. In today’s push-button society everybody wants everything yesterday.

3. Social media can work both ways, it drives discussion but not always in the direction you intended. Be ready to deal with negativity, and listen to your customer’s feedback… sometimes that’s more important than the numbers game and driving sales.

4. Take a personal approach to social media. Your overall message should target your key demographic, but your responses should always target the individual.

Any PR wins? Media, well-known users, or company partnerships, etc? How did they happen?

We have a lot of very well known customers but of course for their privacy we cannot reveal who they are. No significant PR or media wins and no company partnerships, we have tried to stay quite low key while getting started.

What software/tools and resources, mentors or groups did you find useful for growing, if any?

We almost exclusively used social media to grow our brand. We found Instagram to be the best tool for us, we now have over 180K followers on Instagram! With social media we are able to harness the broader messages surrounding health and wellbeing and tie them into our marketing. We don’t just talk about the product, we talk about everything in the health industry and emphasis our product as a part of a healthy lifestyle, not a ‘just another diet’ per se.

If you were to do it all over again, what would you do differently?

I would have given us more time to plan things out. If I had anticipated the incredible rate of growth we would be enjoying, I would have embraced it and planned accordingly rather than considering it some sort of fluke that would pass.

What one thing (knowledge, skill, tool, etc.) would have saved you the most headache if you had it when you just got started?

With so many websites around now, it’s really important to be able to give your website an individual look and feel. You should do something to stand out. For example with the ‘Happy Ending’ Shopify app we now add a personal message that says “You’re Amazing!” at the end of checkout. Although it’s a small thing, it’s a nice personal touch which our customers have responded really well to.

Any other advice to people starting their first online businesses?

Just do it! Believe in yourself and your vision. Everyone has an idea, turn your dreams into plans before somebody else does!

What’s next?

We’re working on lots of innovative new products and the worldwide distribution of our existing products. We’re really excited for what’s to come.

Once you’re all pumped up by the above, check out Shopify’s “Build-A-Business” competition forums, which include all of the questions and answers from past competitions. The forums cover almost every topic imaginable.

What other questions or topics would you like explored? Please let me know in the comments.

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ODDS AND ENDS ELSEWHERE: $10,000 MEMORY CHALLENGE RESULTS

Here’s another example of a success “recipe”…

The biggest memory competition ever held now has a winner! The competition was co-created by me and Grand Master of Memory Ed Cooke, then announced on this blog — it challenged “ordinary” people to learn to memorize a pack of cards in less than a minute.

Irina Zayats, a 24 year-old Ukrainian woman, showed just how quickly a brain can be trained. Miss Zayats had no previous experience using memory techniques, but she learned to perform the gold standard of memory skills (memorizing a shuffled deck of cards) in just five days. In doing so, she won $10,000 and, to her surprise, a job offer from Memrise, the learning platform that ran the competition.

Keep in mind that the American record for this feat was, until recently, 1 minute 40 seconds. And those were trained competitors!

So, how did Irina do it? Here’s the full blog post, and an incredible video of her performance is below:

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Please check out Tribe of Mentors, my newest book, which shares short, tactical life advice from 100+ world-class performers. Many of the world's most famous entrepreneurs, athletes, investors, poker players, and artists are part of the book. The tips and strategies in Tribe of Mentors have already changed my life, and I hope the same for you. Click here for a sample chapterand full details. Roughly 90% of the guests have never appeared on my podcast.

Comment Rules: Remember what Fonzie was like? Cool. That’s how we’re gonna be — cool. Critical is fine, but if you’re rude, we’ll delete your stuff. Please do not put your URL in the comment text and please use your PERSONAL name or initials and not your business name, as the latter comes off like spam. Have fun and thanks for adding to the conversation! (Thanks to Brian Oberkirch for the inspiration)

267 comments on “Case Studies: How to Build Online Businesses That Gross $250,000+ Per Month”

These are some really great stories. I wish I could come up with such great ideas as well. They sometimes sound so easy but it is really hard to find such awesome ideas. What’s your favourite of these business ideas, Tim?

It is really tough but at the same time there are simple solutions to problems that we all have but have gotten use to them. I came up with a better way to keychain called Gatorkey. I have a kickstarter campaign now. The really hard and elusive part is getting noticed. I wish Tim had a book about just that. With helpful and invaluable resources.

Just wanted to say that for a long time now I have been diving into learning ahout maximizing my own learning abilities to master life and success. I love your work and I will read the 4 hour chef as sson as I’m done with the 4hww. Thank you for taking a risk and puting yourself out there, I hope that I can do the same. I am starting my own information security consulting firm and I am learning a lot from you that I will be applying. Thanks again
Daniel Baird

Thanks Tim, for the inspiring post! Seems like this one was meant for me, and I’ll take the advice to heart. The best advice being “Just do it!”, simple as it sounds. When I over think or over plan, I fail to act, but when I experiment, when I do, it creates motion and things head in the right direction.

Really? Wow I still find that amazing to hear. This is all still very surreal for all of us (Shopify Build-A-Business winners) as our companies are all still so young. I met with the other winners yesterday and I must say they were all incredible in their own ways and all still very humble. ‘Work hard, Stay humble”. I’ve had the best experience and could not thanks Shopify or Tim (for some of his great advise yesteray) more.

This is the kind of content that all publishers should strive for, especially those in the Internet marketing field. If you can’t deliver quality content like this, you shouldn’t be putting out 3x blogs a week.

This is a great read. Running an online business is a continual learning experience. Like Ryan, I too was doing my shipping as well as many other tasks in an antiquated manner. I remember one day when I had packaged up 50 orders and included a handwritten thank you’s in each one. It took me most of the day, but it felt great looking at that stack of boxes and knowing I had personally prepped each one for my customers. I think its great to have something to look back on and laugh about once you have built up your business. If you had everything right the first time, you might not have that great story to go along with your business.

Zack, I agree on the stories. I remember the day I decided to outsource my shipping for BrainQUICKEN:

I had packed 20-40 boxes with product and collateral, and then realized my car was dead. It was 30 min to Post Office closing time, and I needed to ship, so I put them all in garbage bags, held them in one hand, and rode my motorcycle all the way there, almost killing myself in the process. Gah!

Hey Mike: Mark from Shopify here. We’d all love to know how much profit they made per month, but a lot of entrepreneurs don’t like to give out that much information about their business. But I suspect they’re all making a lot of profit. 🙂

Hey Louise: Skill based competitions of this size that have financial prizes require us (Shopify) to adhere to US, Canadian, UK, Australian and New Zealand (the countries the competition was open to) lottery and gaming laws. We take this very seriously and go through a thorough auditing process of all the winners. The financial figures the competition winners disclosed on Tim’s blog are legitimate.

No we did not spend money on our marketing but ours is an extreme case as our product and the lifestyle we associate with it (broader discourses surrounding health and positive body image) went viral at exactly the right time for us.

And of course the questions in relation to our traffic are more than reasonable!

I will try to give a little run down on what helped us most on social media! I know how people like their little ‘How-to’s’ 😉

In terms of social media, we have found:
1. Personalised, positive and emotive outreaches (posts) and responses to questions have really helped. For example saying ‘hi lovely!’ rather than a simple hi makes your customer feel much more personally involved and appreciated within your company – this is unusual as manu would find approaches like this ‘unprofessional’ but to be honest i would rather he branded as unprofessional rather than impersonal any day! This has helped grow our brand loyalty to such a level it amazes me every day.
2. Positivity!! I mentioned positivity above but across all of our social media platforms we have really positive communities which we emphasise and moderate. This doesn’t mean deleting comments that are critical but definitely those that are abusive. Often after posts we write “We understand that you are all entitled to your own opinion however we are trying to create a positive and supportive space so please be aware that abusive comments/users will be deleted/blocked at our discretion”. There is so much negativity out there on the Internet we find people respond really well to our positive messages and space – ‘Healthy body, healthy mind’ is a big motto of ours.
3. Reward systems & customer reviews: The extent to which user (often customer driven) content has worked for us is exponential. We now get around 15 ‘before & after’ photos and other positive feedback via email or tagged to #smtfeedback on Instagram. Of course creating interesting, relevant content that your customers want to repost would be in any social 101 blog/textbook but getting out there and personally approaching customers for feedback and offering giveaways for feedback (around half those that send in feedback are selected to win an additional teatox pack to ‘help them continue their journey’) have helped grow our brand exponentially.
4. Reposting customer feedback: Our use of customer reviews and sharing those (including our numerous ‘before and after’ photos) is a great way to make our customers feel personally involved in the company, they also get featured to almost 200k people on our Insta so get their little 15 minutes of fame and as our Instagram account is so positive it’s a great emotive tool. Emotive connections to brands help so much with customer retention and create a great tight knit little community which we call our ‘SkinnyMe tea(m)’ 😉 I would recommend that any brand selling a product or concept should try to get their customers to send in feedback or them with their product if it’s a physical good.
5. Finally, embrace the wider discourses surrounding your product. With our teatox for example, we don’t just market it as ‘just another diet’ per say but we give more generalised health and wellbeing tips which makes you a source of authority or a ‘go to’ person and adds a certain element of authenticity to the brand/product.

Check our our Instagram page if you want to see this in action (Tim moderate this link if you like!) but it’s http://www.instagram.com/skinnymetea online or @skinnymetea on the app.

I really hope that helped as I wrote it all from my phone and my browser kept refreshing and I kept losing where I was!!

Agree with the importance of profit (aka “oxygen”). At the same time, I like Tim’s response re: publishing gross sales vs nothing at all. It takes entrepreneurial spirit and drive to create a revenue stream / top line sales in the first place. It takes wisdom and experience to figure out how to create profit at the bottom of the P&L. Give me a few million in sales any day of the week; I can figure out how to make sure some is left over at the end of the year…

– I understand the desire to know profits. I would love to know these figures. HOWEVER.

– With the exception of public companies, companies and start-ups almost never disclose profits and profit margin, nor intricate financial breakdown.

– So, my choice is A) include these case studies with lots of details and revenue (but not profits) or B) not write about the case studies at all. Which would you prefer?

Like I said, I understand the desire to know, but the realities land us at the above. Secondly, to reiterate what Mark said, we know the EXACT revenue numbers because the transactions go through Shopify. If you do some research online for comparable products sold through public companies, you can probably figure out the estimated profits.

While I do appreciate the curiosity for these companies’ profits, I don’t think it’s a fair assertion that revenue is meaningless and profit is the only beneficial metric. Holding out for that info is simply another excuse for inaction.
That said – what difference does it make to ME if these people are grossing a healthy 6-figure income while netting only 5- or even 4-figures? No difference at all – primarily because I haven’t done either (yet)!
Even if you figure only 5%-10% of these revenues are profit, that’s really impressive to me, as these stores are barely (if even) a year old. And in most cases, these were built outside of the 9-5 grind as secondary incomes!
To illustrate my point: According to research done for The 22 Immutable Laws of Marketing, Toys “R” Us only nets 5.9% of gross revenue. That doesn’t seem very impressive, does it? Perhaps, until you realize that’s roughly 6% of $5.5 Billion in annual sales. They’re netting around $326 Million.
Granted they didn’t start in under a year on Shopify. Is there any reason they couldn’t have? These muses are all just as scalable…
But even if you figure 5% of $250k/month as PROFIT, you’re putting over 12 grand in your pocket!
I’d caution the haters out there not to let curiosity kill your muse…

I feel like the entire point of this blog is to showcase a bunch of ordinary people who, a year ago, were no different than any of us in terms of how many muses, connections, or experiences they had. Just ordinary people with extraordinary hustle!

Profit aside, just in terms of revenue those are pretty amazing numbers! My background in finance tells me that on average profits to be about 20% of revenue. While that is a very broad ratio if you would apply that ratio to the revenue figures that some pretty healthy profit!

Please keep the case studies coming. They are very inspiring!

Tim, I would be very interested in knowing about case studies that relate to content-based websites rather than websites that sell physical products which appears to be the case for the above for case studies.

The reason I ask is that my website [Moderator: link removed] offers content as its main product that aims to improve lifestyles by reducing stress and raising productivity

There is an easy way around not wanting to publish profit $: state whether a company is profitable, and if it is cash flow positive.

The reason this is important to reader is that a company can very merrily go bankrupt with impressive revenue $. And those readers who haven’t yet started a company and are “just” dreaming about it, should not be mislead into taking the financial picture so lightly.

There is no shame in having negative cash flow or not (yet) being profitable as long as the company sees a path to getting profitable and cash flow positive, and has the funding in place to get there.

My own company experienced big growth last year (2012) following 4 tough years after the financial crisis in 2008. But financing that growth was a real cash flow balancing act, to the point where I could not pay myself despite much higher profit. If a reader has family who rely on her or him, or little cash reserves, then they need to go into it with eyes open.

PS: congratulations to the companies featured, and thanks for continuing the case studies. They are always interesting!

How much do you think it costs to make and ship tea bags or an inject molded plastic toy? Ill tell you that its not much. As for marketing ect, it doesnt seem like they are relying on too much of that either. =Verrrry good profit margins

Josh, Gretta from SkinnyMe tea here – you’re spot on! We still handpick each order and mix and package the tea personally so that’s me not helping the profit margin but it’s a very personalised response!

Josh, whilst it may not “be much” there obviously is a cost. i don’t think that asking questions about these case studies is wrong or negative, I think it should be expected. The SkinnyMe Tea is the one I’m most interested in and obviously Gretta has done an amazing job, incredible. Good on her.

But with the mass exposure she is now securing from the competition it has to be expected, especially with her amazing revenue and so early on, that she is going to be questioned. Of course she is.

As someone below asks how did she get so many visitors to the site so quickly? How did she not spend any money as she states? Reasonable questions I think.

I can understand why you would like to know our profits in relation to our revenue but you have to understand that a lot of our customers or potential customers read this information and it can be quite problematic in terms of them feeling ‘over charged’.

As we know from larger designer brands that put a label on a product which increases the price 500 fold often pricing pays a large role in brand reputation and ideas surround exclusivity etc.

I was speaking with Noah the editor in chief of Fast Magazine yesterday and he told me abor a juice cleanse company that sell their individual juices in stores for $11 a juice which is quite a mark up but they want people to associate their products with a larger step toward their health and well being and hope their investment carries over into other aspects of their lives and a drive to live a healthier lifestyle.

I really liked that concept…

So in conclusion (as I’m wiring on my phone and have wrap up but for a brand to reveal their profit margin I would liken to a magician revealing their magic tricks.

We sell tea for $33 for 14days worth – I think you might be able to go figure a little there 😉

Sorry this is months after the fact, but in case others show up here late as I have…

The best way to answer this question is the following:
1) Work your ass off to develop an idea worth building a business around.
2) Take the leap and start it. Go without sleep, pay, time with your loved ones, etc. for months on end. (or longer)
3) Enter a contest like this and agree to share revenue numbers only.
4) Win that competition. (You see how few people are actually going to be left here right?)
5) Graciously give of your time to help others try to duplicate your success.
6) Then have a perfect stranger ask you how much profit you are making on a public website.

This is really the only way to understand just what an inappropriate and intrusive question that is.

The short answer is “F*ck you! Go start your own business and find out for yourself.”

Make one contact that already has that reach, or find a combination of contacts that together have that reach.

Moreover, getting for example, one important tweet from the right person can get you coverage in a host of other blogs which causes exponential growth in traffic very quickly.

For me it was a single post on hacker news -> Tim Ferriss -> Life Hacker -> NYT blog -> and so on. All for just a random blog post. My blog has all of 5 posts and gets updated maybe once in 6 months but it’s had over 100k visitors. This is without any actual marketing effort.

I wrote a kind of 5 steps to our social media success above to Louise if you would like to have a read I think it might be helpful. I tried to he as honest as possible and think more objectively about what really is just an everyday practice for me now.

I still handle all of our social media so I guess I should know best!!

To this day we have still only used social media and yes getting the word out there is definitely the aim!

I wrote a sort of 5 steps ‘how to’ to Louise above so hopefully that will offer a little extra insight.

A sixth step would definitely be reaching out (cold mailing) to other companies for companies with larger followings and pitching to them from an angle (emotional, nationalistic, blatant flattery, product giveaways etc) and trying to get them to ‘promote’ you on their page – you would be surprised how often it works! I know now because we get people approaching us all the time… You just need to make sure the relationship is mutually beneficial when everything is said and done!

Some great companies, but I do not get how anyone could go from idea to 250 000 in 6 months, figuring with initial research, prototyping, manufacturing, marketing, shipping. It is not realistic at all. Also, just getting the word out without already knowing all those influensers mentioned previously is impossible, so it would be great if the story revealed some more info, instead of making it sound like anyone could go from idea to a couple of hundred k in 6 months, when no one, without masses of cash and contacts could even go near it. These posts are usually great, but this time it sounds more like la la land, than like real start ups.

Hey Anna, I totally agree on you: almost nobody can reproduce these (99.9%).

BUT. If you listen to Tim’s interviews and I think he also talks about it in this blog is that he only focuses on the extreme cases in anything: the colorado experiment, the Dodo case, etc. His goal is not to take someone by the hand and mouth-feed them but rather to show you what the best in the world have done and it’s up to the most crazy, innovative, resourceful people to gulp as much information as possible and make the best out of it. It’s only when you take the best, extreme cases that you can more easily extract common points that lead to success.

It took me much time to understand that even when you give the exact answer to do something extraordinary, people can’t reproduce it or don’t even bother, even if it would bring them tremendous success. I guess it all come down to having extreme willpower and a no-quit attitude to achieve your goal, 80-20 analyze and improve on an ongoing basis. Sometime I’m helping friends for free to build a solid web-presence/strategy and i tell them exactly what they should do to build healthy traffic in the easiest way possible with the best results for their particular field, I even give them a monthly todo list item by item and ideas and… they start 1-2 weeks and quit going back to their old self, the default behavior. But when I charge tons of money, people tend to listen more. It blows my mind and infuriate me at the same time. The point I’m making is that it’s pointless to do a step-by-step guide because the people who will succeed at building a muse business will do so no matter if they have todo list or not and the people less likely to succeed wouldn’t anyway even if we’d spoon-feed them. I guess you need to have a hard time and to fail, try, re-try and develop that problem-solving attitude habit in order to, in the end, win.

In January 2013, I participated to a 30 day contest in order to win a free consultation with Neil Strauss (one of my favorite gurus). I though “I have no chance, there is 1000 hard core fans taking on that contest but I though “it’s worth the risk” and the contest was great anyway”. So I read the rules and did everything like crazy for 30 days straight, no breaks, no let-down, no giving up, etc. And the most amazing thing happened: I had an epiphany. As days went by, I noticed that many people didn’t do the required tasks, or they didn’t do them right, or they didn’t put effort, etc. 2 weeks in, 60%+ of the people had quit or were inconsistent. 3 weeks in and there was only 20 people left. In the last week, there was only 10 people left (out of 1000 hard core fans (the “creme de la creme”), remember) and of those 10, 3 could not win (failed to do the requirement), 2 did “just” what was needed and was clearly a lack of effort and in the end, 5 hard core people, including me gave it everything they had. Neil chose 5 winners, including me, and I’ll meet him in July and I can tell you I was ecstatic about that. Lesson learned: most people try, some give it 50% effort and complain it doesn’t work, some don’t do the right thing, and only a very few care to give it all. Even if they don’t win, at least you learn a tremendous lot in the process and can build on that to succeed later on. It’s the same thing with these muses businesses: only the most hard core will bother to do the whole todo list, build a network, help others, focus on the market, build a great innovative product the lean startup way, etc.

Now to answer your question: yes, you need to have amazing support and networks in order to succeed, unless of course, you’re extremely lucky and at the right time and place, but it’s highly unlikely. If everyone could launch something and make 1 million per year with little work and no network, it wouldn’t make sense! Being part of “the 1%” means thinking and working like a 1%, not hoping to get rich with little work. Also, when you hear someone who went from 0$ to 1 million in 6 month, it means their success is based on all the years they worked, experimented, etc before that 6 month on a specific project.

So, walls are there to block people that don’t want something bad enough. If you want to build a high $ company, practice, experiment, grow your network and it’s a matter of time before you achieve it. Also 80-20 your life/work/productivity everyweek and make sure to have s.m.a.r.t goals (measurable).

Joel – thanks for the absolutely amazing comment about your Neil Strauss experience. Of all the stuff I read daily, of all the books I’ve read in the past, of all the comments, discussions, chit-chats and other baloney Ive looked at, thought about, participated in or otherwise spent time on, your comment really cut to the chase and struck home. It just suddently brought order into an old chaotic puzzle, the missing link, so to speak. Massive thanks!!!

What I was doing was calling Bull! Your theory of the 1% and ‘little’ or ‘lots’ of work is irrelevant. Of course you have to work hard and tons of people work like idiots to get a start up of the ground. But let’s not anyone pretend you an go from 0 to 250 000 K in 6 months. It has nothing to do with hard work or not, it has to do with realism and time constraints of finding manufacturers, shipping, getting sales IDs, setting up payments, doing all the work described above takes time, even if you work hard. Especially if you are supposedly one person doing it all….

It is impossible to do what she describes in 6 months. Anyone who has had an idea, gone through research, made prototypes, written and designed a book, designed logo, website, secured fulfillment, and then secured production AND had the good delivered AND sold up to 250 000 a month, knows it does not happen in 6 months. It is physically impossible. Unless she threw millions at the project, and had a staff of pros, but even then with production at least 1 month, shipping 6 weeks, and US customs for shipments usually taking a month to clear, I still call Bull.

Oh, a quick google search shows she did not do it in 6 months anyways…. so Bull!

Tim, love what you do, but why exaggerate? It doesn’t make anyone feel any better. All it does is dissuade people from trying again when they do not get such unrealistic results. Let’s be real, shall we?

Don’t forget that GoldiBlox raised funding for the initial product run on Kickstarter. 6 months may seem a really short time to build a business in a traditional manner but when you consider crowdfunding, sales are made before the product exists in bulk on the basis of a high quality sample.

They pre sold between 5 & 6 thousand toys (and other merch) in Oct 2012, raising over a quarter of a million dollars. On the Kickstarter page Debbie made it clear that it took her life savings and help from expert advisors to get the point where the Kickstarter had launched and they were ready to place their first order with the manufacturers.

They then had another boost of publicity in the November and sold out of their entire first run shortly after (40k toys)

These intervews just highlight how much infrastructure has changed in building a business – an online store with Shopify in it’s most basic form can go live in just a few hours & you can sell a product (that you don’t actually have yet!) to six thousand people!

It’s not impossible – just unusual, that’s why it makes a great case study and a deserving winner.

I’m glad I read through the comments tonight, because your reply has really offered a lot of insight to me for two different reasons.

When I was in high school 10 years ago, I played in a classic rock cover band. The band was great, except none of us could sing, and we couldn’t find anyone to sing lead. So, I got really into learning to sing; I read all the books and watched all the videos, but I NEVER improved. To this day, I can tell you everything about the vocal mechanism, but I can’t actually sing myself.

When doing all the research, I wondered why the greatest rock singers never offer any tips on singing. How does Brian Johnson of AC/DC get that tone without losing his voice? How does the guy from JET scream like it’s no big deal? What were their breakthroughs? They had no interest in sharing what they’ve learned from point A to point Z, so people like me could learn to sing.

It’s because they didn’t have to. They figured it out themselves, and they don’t want to share the knowledge with anyone else. Why didn’t they share their knowledge? They probably thought, ‘I was able to figure it out on my own, so those that really want it will be able to as well.’ It devastated me that as a self-taught musician, the people who I looked up to musically didn’t share the details of their story so maybe I could succeed.

After all that frustration and anger, I never did learn to sing. But it’s my own fault. I could have got a job and paid for lessons for someone to teach me. I could have done more.

I’m going through this again with my small business. I have been seeking out advice and successful people who’s books taught me so much, because they didn’t cover what I’m going through. And I haven’t found the person who has the to-do list that you mentioned, because nobody has written it or needs to write it.

The people that are going to succeed will find a way; it won’t just magically fall into their lap on day.

Hi Allen,
I can understand your frustration at not getting the information you wanted from your Rock idols…but you might want to consider the fact that there may have been nothing for them to teach. Some things come naturally to people and it’s incredibly hard to teach someone else.

I think in most cases people can learn some things from others, but we can’t necessarily replicate exactly what others have done. We each have our own path and our own strengths. We’ll learn the lessons we need to (if we’re open) to get us to where we want to be.

I’m sure with whatever you endeavor to do in the future and in your small business now, you’ll figure it out. You can seek out advice, but ultimately your intuition is your best advisor.

I personally don’t think other people’s “to-do” lists are a one size fits all kind of thing. We all do things differently. Consider what others have done, but forge your own path.

Fantastic comment, Joel! Thanks so much. That is a great example with Neil (a good friend of mine), and the numbers look just like every competition I’ve ever run on this blog.

As you said:
“His [Tim’s] goal is not to take someone by the hand and mouth-feed them but rather to show you what the best in the world have done and it’s up to the most crazy, innovative, resourceful people to gulp as much information as possible and make the best out of it.”

I would simply subtract “crazy, innovative” from that statement 🙂 It just takes the extra commitment that largely separates the “overnight” successes from the also-rans.

JOel, no one is asking for a “step by step guide”. Not at all. We are asking very simple, reasonable and, I believe, expected questions.

Also these case studies are not “extreme cases” as you state. They are normal day to day start up businesses.

I think, per my post above, that it is normal and reasonable to ask Skinnyme Tea how she so quickly reached 600k per month revenue on average sales of around $35 (this could be wrong i”m just hypotheting sp?).

She’d have to be reaching millions to reach this sales figure 600k per month.

Surely anyone would question this claim. Shopify have confirmed the figure. So how did she reach this many? She states Instagram. Did she soley use this?

This makes me wonder how many great (or better) ideas were a part of this contest that didn’t win because the follow-through and extra effort was not put in.

Even as I see on Shark Tank, the ideas that ultimately are successful and get the funding aren’t as much about the idea being so great but about the dedication of the person and a proven business model behind them that attracts the investor.

I bet the founders of Skinny-Me-Tea are glad they didn’t have the same mindset you’re starting off from.

Goldie-Engineer is pleased she figured out a way.

Granted not everyone will create a $600’000 business. But what if you could recreate 10% of their success? Maybe $60’000 a month! Sound nice? Okay, what about if you recreated 1% of their success? Would you want an automated $6’000 a month more, in your back pocket? Okay, let’s factor in a 50% tax on that amount, to cover overheads, stock purchase, and the alike, and you’re left with ONLY $3’000 a month in your pocket…..would you be complaining?

Initial investment would be, let’s say $3’000. Within 1 year, you are making $3’000 a month. So, you are managing to get 200% cash return on your initial investment, a month! With 0.5% interest coming from banks, and around 5% inflation, I think it’s a much better idea to attempt success, than to groan that others have done it better than you have.

The idea of this article, to me, is to inspire and show the possibilities and opportunities available.

Just to clarify the 200% return, initial investment (cost of stock, etc of your initial investment, regardless of profit, would be -$3’000 from your account, and I’m using this same figure for current cost of running the business) and a net profit of $3’000, totalling $6’000, which is 2x your initial investment.

Thanks, Tim. I love the case studies. It is inspiring that many small companies are bringing in so much money, yet frustrating that I haven’t figured out how I’ll do it. The other topic I would like explored is market research. How to determine what existing product to sell, or what to create and sell? And then, determine who would buy it.

I am with Anna, how does a business get to 600K in a few months with all the products, website, prototyping and what not. I would love to have a follow up done with Gretta to see how she accomplished all this.

Wow, Gretta, congratulations. That is a pretty amazing journey. You must just sit and sometimes start giggling to yourself, no? I would have to pinch myself occasionally.

So we are in the midst of a startup that will hopefully mirror your success (or better :)) and I have one burning question I would love dearly to hear your response on…

Q – How do you, did you target and get young women to participate and send in so many #smtfeedback before and after shots. It is simply amazing.

Obviously having a product that works is #1, but how did you encourage it? Did you run promotions? From what I can tell it has to be one of the largest contributors to your rapid success.

And, to Joel’s awesome commentary above, he is absolutely correct. Experience plays a big role as well. I don’t want to say you have to fail to succeed, but look at how many times you go to bat. If you haven’t struck out a few times, you haven’t been trying.

Gretta – love your story! I’m guessing you had 500,000 people visit your site each month you hit $600,000 (assuming $60 price and 2% conversion) – amazing! Any tips on how you were able to use social media to get that level of reach so fast?

Hey, so I’ve just recently graduate college with a degree in exercise physiology, gone through a lot as a kid the worse degree of epilepsy for 9 years something around 430 grand mall seizures a day, and then cancer not too far after. So I’m really looking to start living and traveling and quit this surviving lifestyle. When Tim when on his 15 month sabbatical he said had more money than he knew what to do with. Being a recently graduated college student I do not. So my question is what do you need to start such a lifestyle? Is there a rough amount you need to establish before you can begin, and does that mean a person has to subject themselves to that X hour a week lifestyle? Again I really appreciate any feedback cause I’ve gotten nothing but negative feedback from friends and family on this idea.

Tim, as always, a great lesson. Common threads:
1. Have an idea? Just do it!;
2. Identify and test your market and learn what they are looking for;
3. Set your online strategy in motion before your product is ready for launch;
4. Plan for additional lead times;
5. Add a visual element (video or picture);
6. Add an emotional element (tell a story) that accompanies your product.

It is true that having a strong network of social media influencers is helpful to launch a product. It is also possible to build that kind of network for yourself, if you do a little research, craft good emails, and get involved in social groups that are related to what you’re doing. Also read “1000 True Fans.”
Sales do not equal profit, but adjust for 5-10% annual growth and factor initially 10% profit (most of the time reinvested into R&D), the depreciating cost of any machinery, and then the low overhead, minimal pr costs, and buzz generated from this article alone, those monthly numbers could easily equal profit in 12-18 months or less depending on additional product lines.

Steve,
Hi Nella here from fresh-tops.com one of the competition winners.
You’ve got it, its helpful to have a strong social network yes and connect with others that have the same. If you have a good product people will gravitate towards it.
I’ve been reading the comments and I’ve notest a frustration in the fact that profits are not discussed and a disbelief in gross over 6 months. As Gretta from Skinnymetea was stating that people are underestimating “social media”.
Like Gretta here at fresh-tops.com we use no marketing, and from the sounds of it the other competition winners used no investment on marketing also. Just pure word of mouth our first year in business. One of the most epiphanies I’ve had is realizing that we are all living in a different age, the “DO IT NOW” age were the internet allows EVERYBODY a chance at expressing an idea and opening opportunity to provide a service.
This is why my favorite quote from Nike “Just Do It!” hits home for me. Just put your ideas out their online. You have the internet now, and people are simply not doing enough research on how simple it is to get people involved online.
I am thinking about writing a book on this topic also.
Don’t focus on SELLING something, focus on problem solving (great ideas) and providing a great social interaction (get people involved), especially online.

Fantastic to see more real-life case studies being examined — and winning the competitions. Love the while idea of the Shopify Build A Business Competition – it gives great inspiration, and the support they had this year from Tim, Eric Ries, Tina and Co. was immense.

I would like to “like” this a million times over. I can’t tell you how many times I’ve grabbed great ideas and process tips from the comments of these posts! It is very true, everyone here is tremendously giving …

I love real world case studies of people who started their idea from scratch. The GameKlip will have a huge audience. I do miss my original GameBoy. I’m just amazed at the acceleration in their growth. It shows what you can do when you fill a need. Great job to the winners. Way to take action. Usually thats the scariest part.

Great post, always interesting to learn more from entrepreneurs and start-ups from people with no former business experience.

How are all these contacts made so easily? Everyone seemed to meet or connect with the right people early on and get interviews and publications in magazines and online blogs that really got the word out.

However, I still don’t know how a person goes from having an idea to selling a product, like SkinnyMeTea.

I often have lots of ideas for products, but what is the first step in terms of turning an idea into a product. Do you try to make a prototype yourself? Do you get a patent first. Do you ask others for assistance in developing a prototype before getting a patent?

Personally, I’m super inventive, but don’t have a clue where to start 90% of my ideas. As a result, I’ve stuck to the simpler ideas that I can figure out the process of.

Let’s take an example of a house.

Product 1. A house!
I know nothing about how to make a house!!!
Google….damn, I’m out of my depth!
Idea failed….for my criteria at least.

Product 2. A Brick for a house.
I know nothing about how to make a brick for a house, but I can google it.
Googled….seems understandable enough.
Break down what’s needed….google this.
Find supplier of what’s needed.
Order what’s needed.
While waiting for order to arrive, google companies that make your sand into bricks.
Try to make deal with them on ‘Sample’ batch.
During this time, find companies that want to buy your bricks. No point having a product without a customer ready to buy it.
Call customer (once found) and negotiate a ‘sample’ batch.
If brick making company is happy to do it, and the customer likes the sample (sample bricks to be send direct to customer, because I’m not a fan of carrying bricks)….get order from customer.

In between this process, you need some boring legal paperwork so that your brick building co doesn’t poach your customer, but if everyone makes a reasonable profit, you should be okay. But get the legal paperwork just in case.

Tim, you didn’t include the cost of these start-ups. A lot of people tell stories about “you can do this” or “here’s what they did and how they did it”, but they leave out the key ingredient. How much did it cost? Expense is material. How much did it cost before it started to pay for itself? How much money was required and where did it come from?

Hi Gretta!
I am wondering how you found somebody to do your own private labeling/ packaging and also being the wholesaler that drop ships? I am having trouble finding this resource for my specific product..and the wholesalers in alibaba, do not do the packaging I need for less than 200,000 kilos. and I cant commit to that per month when starting. Do you create, print and package, ship all at home?
thank you for taking the time to guide us new starters!
Cheers!
Jennifer

How did SkinnyMe Tea get so huge so fast? Is there that big a demand of people looking to lose weight that a seemingly common product can just make a claim and because a massive seller? Sounds like she just posted on Instagram.

At least for the initial stages of a startup or online business: Is there no way around having to hustle like a mother-fer 24/7?

Don’t get me wrong, I have nothing against being passionate about something and putting in a lot of work, but being very health-conscious and having experienced the repercussions of long-term sleep deprivation mixed with working my ass off in the past, I don’t see myself working to the point of suicide, even if it’s just for a couple of months.

You said writing the 4HC (understandably) shaved off 5 years of your life, while in theory the 4HWW and the 4HB suggest that you had the tools and knowledge to prevent that (I love all your books though, don’t get me wrong)

So at the end of the day, no pain no gain? Or, being a perfectionist in certain regards, did you choose to inflict all the torture (followed by great rewards) upon yourself?

Loved this whole article! Super inspirational. I have read the 4-Hour Work Week twice and am constantly thinking about how to get muses up and running! It was very beneficial to read insights from real-life examples. Keep this stuff coming!

After working on some dreamlines last night, I actually came to the site today with the intenion of looking up people who have already started business with the hope of maybe getting in contact with a few of them to get some ideas, tips or advise. So thanks for posting this its literaly just what I was looking for.

Congrats on your success. I am into the health and fitness business myself (9 years of international experience now) and I have had very great results too.

I would like to point our a couple of key facts:

– the health/weight loss/detox market was/is/will be a winner.it is not just a fad but a LONG term trend. Then, if you sell a consumable product (like you do), having repeat orders is easy (75% of my business is based on repeat orders of satisfied customers)

– instagram: here I have learnt a lot from you. Very smart how you request “before and after” pictures of your customers. Basically your product is a “truth about abs” product “disguised” as a detox program. Women love having flat stomach, it makes them feel sexy and attractive. And if they can have it without effort at low price (no exercise, just drink this tea!), then you have a winner

– instagram 2: I see you have your own internal designer (so you dont simply post other people’s content): I do this as well, 90% of the content I publish is proprietary, quality stuff. That’s why goes viral! you can not expect to simply copy and paste an image and hoping people will share it with their friends. You must be original in your content. Quality over quantity.

– your advertising is quite aggressive: basically says just drink this tea twice a day and you will speed up your metabolism, lose weight etc (in europe it will be considered false claims, so just be very careful)

– given your level of success, I am sure your AU competitors will start fighting against you (again, on your marketing mainly): if I were you I would set aside some cash for legal fights). Be extra careful in your marketing as you expand internationally, if I were you I would scrutinize my marketing material and make 100% sure it is compliant with local rules and regulations.

– it seems your mentor did a fantastic job, I guess mostly with your marketing (product creation is always very easy, the tough part is the marketing….and you did it all virally without spending money in advertising. Truly phenomenal!!!

PS: for everybody so concerned about her profit levels (and not just top line figures): her markup should be in the region of 10x….if not more…..

Congrats again on implementing your VISION (or good luck…I dont know which one played a bigger role in your success, but it doesnt really matter).

Tim: great job on your blog and books. People need to be inspired, to have a dream. And a BIG dream is what makes people work 25 hours a day to launch their muse! So I agree with you in showing outliers and not just averages (mode or mean….) lets only look at the far right side of the Bell curve please, we have plenty of losers around us already…and they certainly dont inspire us (quite the opposite really)

I made so many mistakes when doing 5000 month in sales and as we grew to over 100,000 than 200,000 a month we made much fewer mistakes, but the ones we did are so much bigger. Hearing others lessons can only make us stronger.

Tim,I have an idea for a 5 hour energy Like drink but without giving to much away Its Like if your previous supplement (brainquicken) and 5 hour energy had a baby.lol. So i really want to do this Right but have no clue how to market it or really where to start???? Can you make any suggestions? Btw,I do read your book religiously almost Like a devotional. I still feel there are some blanks as to where to start. I have contacted all the heads of these 5 companies asking for their advice but have not heard back yet. Tim! You are my hero! Keep doing What you do! Thanks…..your pal,lol
Kristofer milhauser

We hear nothing but negativity about start ups in the media. We learn how most businesses fail within the first five years and how banks aren’t lending any money.

Then we come here and we hear, first hand about people who are defying any perceived odds and creating successful small businesses with huge profits.

I thinking sharing our experiences is the best shortcut to success. In fact, my own businees asks entrepreneurs to raise their profile by sharing their business stories with other start ups.

There is something about hearing the story behind a brand that really makes it come to life – it elevates it from corporate spin and the heart and values of the organisation become clear. Suddenly, we’re not just being sold the product, we’re being sold the brand, and when we buy into it, we become true fans.

Best of luck to all the entrepreneurs who have done so well. And even more luck to those reading these stories and are just beginning to turn their vision into reality.

Hey Tim, great post.
Just wanted to thank you for inspiring me to start my own online business. I’m not making nearly as much as the people in these case studies, but I have been able to travel the world on the income, all on about 10 hours of work a week. This year I’ve spent 1 month in Japan, two months in Thailand and now I’m in Berlin. I have this incredible lifestyle and want to thank you for the inspiration!

AWESOME article. It’s really refreshing to read how these founders and product-engineers were able to reach their goals. Especially great is to see the different stages in their companies’ lives. Points at which there was an “a-ha” moment or where they encountered difficulties. Lots of great advice tucked in there as well.
Keep em coming!

Really good blog – so much so have added it to my recommended reads on Twitter.

Very valid point about the difference between ‘inventor’ & ‘entrepreneur’. So many people are scared someone will pinch their brilliant idea, but in reality this rarely happens. The real show-stopper really lies in where to find people to help… So many give up on their genius idea because their circle does not contain those magical people to give them the support & help they need to turn their idea into reality…

Man these are awesome! I love this creative, outside of the box approach! Thank you so much for the insight on the nuts and bolts of the operation. I sounds like everyone here enjoys the journey, not just the goal!

Tienes razón lo de las redes, deberíamos empezar una comunidad de latinos con ideas similares y ver como las formamos. [Moderator: Translation – You’re right about the networks, we should start a community of like-minded Latinos and see how we are.]

Tim,
Can you tell me where the sales data was drawn from and whether is is validated? I operate a successful online tea company in Australia and I have to say that I find it extremely hard to believe SkinnyMe Tea is generating over 600k in a year. This is because:
a. The Australian market is small- I do not think T2 even could do this online!
b. They do not do any advertising apart from social media
c. To generate this revenue they would need over 18,000 sales per month purchasing their most expensive product- unlikely with their 30,000 facebook fans
If you did validate the date with Shopify I stand corrected and say well done to this company… if you didnt- perhaps ask for validatation ….

The SkinnyMe Tea, was something I really enjoyed and the ideas it gave could be applied for any new starter who wants quickly take action on those moments of ideas which we get in middle of the night or thinking at a boring desk job.

Great article withe a lot of inspiring ideas to start something that matters.

Awesome examples of success. Curious if anybody will reply to this. Any successful folks on here start their companies completely debt free or did you have thousands of dollars in student loans, consumer debt, mortgage, kids to feed, diapers to buy, and still step out and chase their dream?

It’s always great to read about other people who have experienced success, especially success as dramatic as the people you’ve described in these interviews. I think this is a great post to send to people who are just starting out and still having some trouble deciding whether or not to go on when they hit a rough patch.

Once you say legitmate do you mean creditable naturally but finding them is the challenge. The web has gotten so big so fast jut with the ability to look for a drag the glaze from internet business is most certainly real headache.

I done my research and also have found that it is possible to earning money online but were do you really start and also just how do you keep from getting scammed

I think the biggest challenge for many people is coming up with the idea for a new business. How do you find business categories that are underserved by the current providers. The SkinnyMe founder explains that the idea arrived during a dream. It is interesting, but how can we replicate that?
Do you have any suggestions?

This is very inspiring. I started a successful home business 24 years ago and am transitioning to a digital, online marketing business. Business is in my blood and can understand the thrill and hard work that goes into to building a business, marketing it, and maintaining.

Thank you for the great inspiration and resources. The next great big thing might come from the spark of creativity inspired here.

While reading this, for the 4th time, I had a little notification pop up in the top right corner of my screen. Delivery confirmation and shipping number of my first sample batch of a product. Is it a sign? I’m not into that kind of thing.

One thing I’m pleased to say, I’ve gone from reading this, working full time, my wife’s birthday, a 48 hour BBQ/celebration, 1 day of food shopping and prep, and I’ve still managed to source, quote, purchase, and receive delivery notification, as well as get a doctor to trial the product (he was at the BBQ), and construct a business plan….oh and read this 4 times.

Tim, I just want to say 3 things:

1. AWESOME POST!!!! Really kicked my butt into gear. I love how your case studies said they didn’t know everything, but still just went for it.

2. Awesome book 4HWW!!! Now that I’m actually doing it, everything makes sense. All the trials and testing seems so clear once it’s applied.

3. I LOVE UBERMAN SLEEP!!! Couldn’t have done everything I have done this week, without the Uberman pattern. I didn’t go for the full Uberman, but I’m on a 3 hour version. But I had always wondered how people coped with only a few hours sleep. Your chapter in 4HB was worth the whole purchase price of the book itself!

Thank you so much Tim.

p.s. If you’re truly motivated, and you want to make this happen, or maybe you’re just wussing out and need a kick in gear, why not make this cast study post your homepage, so that every time you turn your computer on, and go online, this is the first thing you see?